ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Definition: When a company purchases goods on credit which needs to be paid back in a short period of time, it is known as Accounts Payable. It is treated as a liability and comes under the head ‘current liabilities’. Accounts Payable is a short-term debt payment which needs to be paid to avoid default.

Detailed explanation-2: -Accounts payable (AP) are amounts due to vendors or suppliers for goods or services received that have not yet been paid for. The sum of all outstanding amounts owed to vendors is shown as the accounts payable balance on the company’s balance sheet.

Detailed explanation-3: -Accounts payable (AP) is money owed by a business to its suppliers to vendors and suppliers for goods that have not been paid for.

Detailed explanation-4: -Answer and Explanation: The answer is Accounts payable. Explanation: The term for the amounts owed to supplies for goods and services purchased is called accounts payable.

Detailed explanation-5: -Accounts payable is also referred to as the department that handles vendor invoices or bills and records the short-term debts in the general ledger (GL). The AP department will verify invoices against (purchase) orders and ensure the goods or services were received before issuing payment to their vendors.